European Union recycling rules vex suppliers

Automakers that sell cars in Europe want a list from suppliers of all the materials in the components they supply and their weight.

But suppliers say complying will cost thousands of work hours and might compromise trade secrets.

The request is in response to European Union rules requiring automakers to increase the recyclable content of a vehicle and, eventually, making automakers responsible for disassembling and recycling a vehicle at the end of its life.

Suppliers and automakers face a July 1, 2003, deadline for the information or risk having sales halted.

But the electronic reporting system set up by the auto companies isn't working well, said Neil De Koker, managing director of the Original Equipment Suppliers Association in Troy, Mich.

"The concern is it takes thousands of hours to complete and enter the data," he said. "It's not clear what is needed and what is not. It's jammed, not user-friendly, and the help desk is totally inadequate."

Big load for Tier 1s

The most onerous task falls on Tier 1 suppliers such as Delphi Corp. of Troy, Mich. Delphi must compile the information from all of its lower tier suppliers. It can't complete a report on a part until it receives all the information from those suppliers, said Glenn Howarth, Delphi's director of environmental services.

The cost of putting the information together depends on the supplier tier, Howarth said. Industry estimates pegged the cost to a raw-materials supplier at $75 to $100 a part. A Tier 1 supplier such as Delphi can spend up to $2,500 to assemble the data for one finished assembly.

Delphi relies on its Tier 2s, but some are reluctant to comply because they're concerned about releasing trade secrets, Howarth said.

"If a Tier 2 supplies to a Tier 1, in some cases they might be a competitor, and there is proprietary information they're unwilling to share with a competitor," he said. "It's basically resulted in not supplying information to date and hampering our ability to get data into the system."

Protecting secrets

De Koker said protecting intellectual property is a major concern for the member companies of his association.

The group wants to know who has access to the data as well as how and where the data are stored.

Howarth and De Koker said meetings with the automakers to develop a better system have been productive, but the deadline is looming.

"We feel there's a far better understanding now than we had," De Koker said. "We still have a ways to go."

Terry Kosdrosky is a staff reporter for Crain's Detroit Business, a sister publication of Automotive News.